Record revenue of $11.9 million in the third quarter of 2011, up 22% over Q3 2010;

Record EBITDA of $3.4 million, a 114% increase from Q3 2010;

Gross profit margin increased to 78.3% from 76.2% in prior year period;

Net earnings for the three months ended September 30, 2011 were $0.1 million, resulting in the Company's first positive earnings per share, compared to a net loss of $1.5 million for the same period in 2010;

Added 75 net customer locations in Q3 2011, compared to 167 in the same period in 2010;

Ended the period with 6,233 customer locations in service, an increase of 19% over the 5,216 at the end of Q3 2010;

Average revenue per customer location ("ARPU") for Q3 2011 was $622 compared to $614 in the same period in 2010;

Average monthly unit churn rate for the third quarter 2011, excluding the impact from the cancellation of 24 low value DSL resale customer locations acquired as part of the MetroBridge customer base, was 1.02%, compared to 0.85% in Q3 2010 and consistent with recent experience. Including these customers, the average monthly unit churn rate in Q3 2011 was 1.16%.

Ended Q3 2011 with $1.8 million of cash, cash equivalents and short-term investments and access to the $6.3 million undrawn portion of the $19.0 million credit facility.

In August, TeraGo was named one of the 50 Most Engaged Workplaces in Canada, an award recognizing top employers that display leadership and innovation towards engaging their employees;

Subsequent to quarter end, TeraGo launched voice services in Winnipeg, Manitoba. TeraGoVoice™ is now available in major markets in Quebec, Ontario, Manitoba, Alberta and British Columbia.

Bryan Boyd, President and CEO, TeraGo Inc. said, "We continued to post strong results in virtually all key measures in the third quarter and extended our momentum with record revenue, EBITDA and strong margins. We also entered a new phase in our short history by achieving positive earnings for the first time."

Effective January 1, 2011, TeraGo's financial statements and Management Discussion & Analysis follow International Financial Reporting Standards (IFRS). An explanation of how the transition from Canadian GAAP to IFRS has affected the Company's financial position, financial performance and cash flows is set out in the company's Q3 2011 MD&A.

Third Quarter 2011 Results of Operations

Revenue

Total revenue for the three months ended September 30, 2011 increased 22% to $11.9 million compared to $9.7 million for the same period in 2010. The increase largely resulted from the greater number of customer locations in service, including the acquisition in the second quarter of 2011 of 585 net new customer locations from MetroBridge, as well as existing customers upgrading their Internet and data connections. Approximately 98% of revenue for the first nine months of 2011 was recurring service revenue.

The average monthly unit churn rate in the third quarter of 2011 increased to 1.16% compared to 0.85% in Q3 2010. The increase in the third quarter of 2011 was primarily due to the cancellation of 24 low value DSL resale customer locations acquired as part of the MetroBridge customer base. Excluding these customer locations, the average monthly unit churn rate in Q3 2011 was 1.02%, consistent with recent experience. Management continues to strive for lower churn rates by focusing on network quality, customer service, and customer creditworthiness.

Gross margin

The gross profit margin for the quarter ended September 30, 2011 increased to 78.3% from 76.2% for the same period in 2010. The increase was primarily due to savings from lower telecommunications and maintenance costs resulting from the Company's focus on network enhancements and reduced spectrum lease payments as the Company now owns the spectrum it formerly leased.

SG&A

SG&A (Salaries and related costs – Other, and Other operating items) expenses of $6.0 million in Q3 2011 were up 4% from $5.8 million in Q3 2010. The increase in 2011 was largely a result of out of service assets that were written off, increased marketing capacity building on investments made in 2010 in pursuit of our strategic growth objectives and, to a lesser extent, additional operations personnel. TeraGo had 33 direct sales personnel at quarter end, up from 31 at the end of the previous quarter.

EBITDA

Q3 2011 EBITDA increased 114% to a record $3.4 million compared with $1.6 million for the same period in 2010. The increase is in line with management's expectations as TeraGo continued to increase revenue while focusing on cost management.

Net earnings / (loss)

TeraGo achieved positive net earnings for the first time in Q3 2011. Net earnings were $0.1 million in the third quarter compared to a net loss of $(1.5) million for the same period in 2010.

Capital resources

At September 30, 2011, the Company had cash, cash equivalents and short-term investments of $1.8 million, and access to the $6.3 million undrawn portion of its $19.0 million credit facility.

Management believes the Company's current cash, short-term investments, anticipated cash from operations, access to the undrawn portion of debt facilities and its access to additional financing in the form of debt or equity will be sufficient to meet its working capital and capital expenditure requirements for the foreseeable future.

ARPU

Average monthly revenue per customer location, or ARPU, increased to $622 in the third quarter of 2011, up from $614 for the same period in 2010. The increase was primarily a result of service capacity upgrades by existing customers, a higher proportion of new customers choosing higher capacity services or voice services, and lower credits partially offset by lower usage revenue.

Shares outstanding

As of November 8, 2011, TeraGo had 7,650,984 Common Shares, 3,633,474 Class A Non-Voting Shares and two Class B Shares outstanding.

TeraGo's spectrum portfolio

TeraGo owns 76 spectrum licences in the 24 GHz and 38 GHz bands, covering Canadian markets with a population base of nearly 23 million and plans to use this additional spectrum to provide Ethernet-based broadband links for businesses, government and cellular backhaul, as part of the Company's growth strategy.

Conference Call and Webcast

Management will host a conference call on Thursday, November 10, 2011, at 9:00 a.m. EDT to discuss these results. To access the conference call, please dial 416-695-6616 or 1-800-355-4959. A replay of the conference call will be available until November 10, 2012 at midnight EDT. To access the replay, call 905-694-9451 or 1-800-408-3053, followed by passcode 3706517. The call will be accessible via webcast at www.terago.ca or at http://www.investorcalendar.com/IC/CEPage.asp?ID=166096. An archived replay of the webcast will be available for one year.

TeraGo's unaudited financial statements for the quarter ended September 30, 2011, and the notes thereto, and its Management Discussion and Analysis for the same period, have been filed on SEDAR at www.sedar.com.

Non-IFRS Measures

The term "EBITDA" refers to income before deducting interest, taxes, and amortization. EBITDA is a term commonly used to evaluate operating results. We believe that EBITDA is useful supplemental information as it provides an indication of the operational results generated by our business activities prior to taking into consideration how those activities are financed and taxed and also prior to taking into consideration asset amortization. We also exclude foreign exchange gain or loss, accretion expense, gain or loss in network asset disposals and stock-based compensation expense from our calculation of EBITDA. EBITDA is not a recognized measure under GAAP and, accordingly, investors are cautioned that EBITDA should not be construed as an alternative to operating income or net income determined in accordance with GAAP as an indicator of our financial performance or as a measure of our liquidity and cash flows. EBITDA does not take into account the impact of working capital changes, capital expenditures, debt principal reductions and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows. Our method of calculating EBITDA may differ from other issuers and, accordingly, EBITDA may not be comparable to similar measures presented by other issuers.

The term "ARPU" refers to our average revenue per customer location. We believe that ARPU is useful supplemental information as it provides an indication of our revenue from an individual customer location on a per month basis. ARPU is not a recognized measure under GAAP and, accordingly, investors are cautioned that ARPU should not be construed as an alternative to revenue determined in accordance with GAAP as an indicator of our financial performance. We calculate ARPU by dividing our service revenue by the average number of customer locations in service during the period and we express ARPU as a rate per month. Our method of calculating ARPU may differ from other issuers and, accordingly, ARPU may not be comparable to similar measures presented by other issuers.

The term "churn" or "churn rate" is a measure, expressed as a percentage, of customer locations terminated in a particular month. Churn represents the number of customer locations disconnected per month as a percentage of total number of customer locations in service during the month. The Company calculates churn by dividing the number of customer locations disconnected during a period by the total number of customer locations in service during the period. Churn and churn rate are not recognized measures under GAAP and, accordingly, investors are cautioned in using it. TeraGo's method of calculating churn and churn rate may differ from other issuers and, accordingly, churn may not be comparable to similar measures presented by other issuers.

Forward-Looking Statements

This news release includes certain forward-looking statements that are made as of the date hereof and that are based upon current expectations, which involve risks and uncertainties associated with our business and the economic environment in which the business operates. All such statements are made pursuant to the 'safe harbour' provisions of, and are intended to be forward-looking statements under, applicable Canadian securities laws. Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. For example, the words anticipate, believe, plan, estimate, expect, intend, should, may, could, objective and similar expressions are intended to identify forward-looking statements. By their nature, forward-looking statements require us to make assumptions and are subject to inherent risks and uncertainties. We caution readers of this news release not to place undue reliance on our forward-looking statements as a number of factors could cause actual results, conditions, actions or events to differ materially from the targets, expectations, estimates or intentions expressed with the forward-looking statements. When relying on forward-looking statements to make decisions with respect to the Company, investors and others should carefully consider the risks set forth in the Q3 2011 MD&A and 2010 Annual Information Form that can be found on SEDAR at www.sedar.com and other uncertainties and potential events. Except as may be required by applicable Canadian securities laws, we do not intend, and disclaim any obligation to update or revise any forward-looking statements whether in words, oral or written as a result of new information, future events or otherwise.

About TeraGo Networks

TeraGo Networks Inc. provides small and medium sized businesses with carrier-grade wireless broadband, data and voice communications services. The national network service provider owns and manages its wireless IP network servicing more than 6,200 customer locations in 46 major markets across Canada including Toronto, Montreal, Ottawa, Calgary, Edmonton, Vancouver and Winnipeg. TeraGo Networks is a Competitive Local Exchange Carrier (CLEC) and is a wholly owned subsidiary of TeraGo Inc. (TSX:TGO). More information about TeraGo is available at www.terago.ca.